As the 2024 Budget looms, a pivotal proposal has surfaced, calling for the establishment of the Eighth Pay Commission. This commission is tasked with reassessing the pay scales, dearness allowances (DA), pensions, and various benefits for central government employees and pensioners.
In a compelling appeal, Shiv Gopal Mishra, Secretary of the National Council (staff side, Joint Consultative Machinery for central government employees), has formally urged the Cabinet Secretary to expedite the formation of this critical commission.
Historically, a central pay commission is convened every decade to evaluate and recommend necessary adjustments to the pay structure of government employees, in response to economic variables such as inflation. The last, the Seventh Pay Commission, was instituted by former Prime Minister Manmohan Singh on February 28, 2014, with its recommendations implemented from January 1, 2016.
Given the ten-year cycle, the proposed Eighth Central Pay Commission is anticipated to come into effect from January 1, 2026. Nevertheless, the government has yet to officially announce its establishment. With Prime Minister Narendra Modi’s administration freshly renewed for a third term post the 2024 Lok Sabha Elections, over a crore central government employees await anxiously for updates regarding their pay and allowances.
Mishra underscored the escalating post-COVID inflation, now averaging 5.5%, compared to pre-pandemic levels of 4% to 7%. He pointed out that despite an 80% surge in the retail prices of essential commodities from 2016 to 2023, the dearness allowance for employees has only been adjusted by 46% as of July 1, 2023. This discrepancy underscores the urgency for a review and adjustment of the DA to match the actual rise in living costs.
Advocating for more frequent reviews, Mishra suggested adopting the Aykroyd formula, which periodically assesses commodity prices that form the common man’s consumption basket, as reviewed by the Labour Bureau at Shimla. This method, he argued, could serve as a basis for regular revisions to the pay matrix, circumventing the need for decadal Pay Commissions.
Mishra also highlighted the unresolved issues regarding the pension system under the CCS (Pension) Rules, 1972 (now 2021), especially for those recruited post-January 1, 2004. Despite DA for government employees and pensioners hitting 50% from January 1, 2024, there has been no movement to reinstate the traditional pension scheme. Additionally, the 20 lakh civilian central government employees contributing 10% of their basic pay and DA to the National Pension System (NPS) face a significant reduction in their take-home pay.
In his persuasive letter, Mishra asserted the necessity of constituting the Eighth Central Pay Commission without delay. He emphasized the dual objective of meeting contemporary life requirements and attracting highly qualified talent to government service. The letter concludes with a call for immediate discussions and settlements to revise the pay scales, allowances, pensions, and other benefits of central government employees, reflecting the current economic realities and ensuring fair compensation.
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